When there is a house that a buyer wants or interested in, the buyer will make a verbal offer. If the seller is interested to sell the house, the next thing that the buyer should do is to make the offer written. This is usually drawn up by the seller’s agent, but a buyer’s agent and or real estate lawyer can also make the offer and negotiate on the buyer’s behalf.

The purchase offer the buyer submits usually contains the following:

• Address and sometimes a legal description of the property 
• Sale price 
• Terms -- for example, all cash or subject to your obtaining a mortgage for a given amount 
• Seller's promise to provide clear title (ownership) 
• Target date for closing (the actual sale) 
• Amount of earnest money deposit accompanying the offer, and whether it's a check, cash or promissory note, and how it's to be returned to you if the offer is rejected -- or kept as damages if you later back out for no good reason 
• Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller 
• Provisions about who will pay for title insurance, survey, termite inspections and the like 
• Type of deed to be given 
• Other requirements specific to your state, which might include a chance for attorney review of the contract, disclosure of specific environmental hazards or other state-specific clauses 
• A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing 
• A time limit (preferably short) after which the offer will expire 
• Contingencies 
  

When drafting an offer or a contract, several contingencies can be incorporated. These usually are a satisfactory appraisal of the home, a satisfactory inspection and the ability to obtain adequate financing to buy the house. Contingencies are like when the appraisal or inspection is unsatisfactory or the mortgage is not enough, there is still an opportunity to renegotiate the contract with the seller or back-out of the deal.

So if the house for sale is quite old, the buyer should consider putting in a cost-of-repair contingency. This lets the buyer backs out if the estimated cost of repair recommended by the home inspector exceeds a specific amount. So even if the seller agrees to pay for the repairs, the buyer can still back-out if the buyer thinks that there will be costly repairs in the future.

The offer, when accepted can be binding as a valid a purchase contract.